SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e) (2))
(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Under Rule 14a-12
The Talbots, Inc.
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
- --------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
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|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
- --------------------------------------------------------------------------------
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
DEFINITIVE PROXY
April 27, 2000
ANNUAL MEETING OF SHAREHOLDERS
May 25, 2000
Dear Shareholder:
It is a pleasure for us to extend to you a cordial invitation
to attend the 2000 Annual Meeting of Shareholders of The Talbots, Inc. to be
held at 9:30 a.m. on Thursday, May 25, 2000 at FleetBoston Financial, first
floor auditorium, 100 Federal Street, Boston, Massachusetts. The Notice of the
Annual Meeting, Proxy Statement and form of proxy are enclosed with this letter.
Your vote at the Annual Meeting is important to Talbots and
we ask you to vote your shares by following the voting instructions in the
enclosed proxy.
We look forward to seeing you at the Annual Meeting.
Sincerely,
ARNOLD B. ZETCHER
President and Chief
Executive Officer
<PAGE>
DEFINITIVE PROXY
THE TALBOTS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 2000
To Talbots Shareholders:
The Annual Meeting of Shareholders of The Talbots, Inc. will
be held at FleetBoston Financial, 100 Federal Street, Boston, Massachusetts, on
Thursday, May 25, 2000, at 9:30 a.m., for the following purposes:
1. To elect eight directors.
2. To approve an amendment to the Company's Certificate
of Incorporation to increase the authorized shares of
Common Stock from 40 million shares to 100 million
shares.
3. To approve the amended and restated directors stock
plan.
4. To ratify the appointment of Deloitte & Touche LLP as
independent auditors for the 2000 fiscal year.
5. To act upon such other business as may properly come
before the Annual Meeting.
Shareholders of record at the close of business on April 7,
2000 are entitled to notice of and to vote at the Annual Meeting or at any
postponement or adjournment.
By order of the Board of Directors,
RICHARD T. O'CONNELL, JR.
Secretary
April 27, 2000
YOUR VOTE IS IMPORTANT. TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING,
PLEASE VOTE YOUR PROXY, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE>
DEFINITIVE PROXY STATEMENT
THE TALBOTS, INC.
175 Beal Street
Hingham, Massachusetts 02043
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 2000
PROXY STATEMENT
This Proxy Statement is being furnished to the shareholders of
The Talbots, Inc. (the "Company" or "Talbots") in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders to be held on Thursday, May 25, 2000, at 9:30
a.m., at FleetBoston Financial, 100 Federal Street, Boston, Massachusetts and at
any postponement or adjournment (the "Annual Meeting"). At the Annual Meeting,
shareholders are being asked to vote on (1) the election of eight directors, (2)
an amendment to the Company's Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 40 million shares to 100
million shares, (3) the approval of the amended and restated directors stock
plan (the "Restated Directors Plan"), and (4) the ratification of the
appointment of Deloitte & Touche LLP as the Company's independent auditors for
the 2000 fiscal year.
This Proxy Statement, Notice of Annual Meeting and proxy are
first being mailed to shareholders on or about April 27, 2000.
GENERAL
The holders of shares of Common Stock of the Company of record
at the close of business on April 7, 2000 are entitled to vote such shares at
the Annual Meeting. On April 7, 2000, there were 30,710,182 shares of Common
Stock of the Company outstanding.
The presence in person or by proxy of the holders of a
majority of the shares outstanding on the record date is necessary to constitute
a quorum for the transaction of business at the Annual Meeting. Each shareholder
is entitled to one vote, in person or by proxy, for each share of Common Stock
held as of the record date on each matter to be voted on at the Annual Meeting.
Abstentions and broker non-votes are included in determining the number of
shares present or represented at the Annual Meeting for purposes of determining
whether a quorum exists.
Directors are elected by the affirmative vote of a plurality
of the votes cast at the Annual Meeting and entitled to vote. Abstentions are
not counted as votes in connection with determining the plurality required to
elect directors and have no effect on the outcome of that vote.
<PAGE>
Approval of the amendment to the Company's Certificate of
Incorporation requires the affirmative vote of a majority of the outstanding
Common Stock entitled to vote at the Annual Meeting. Ratification of the
appointment of the independent auditors requires the affirmative vote of holders
of a majority of the shares of Common Stock present in person or by proxy and
entitled to vote at the Annual Meeting. Abstentions would have the same effect
as a vote against the amendment to the Certificate of Incorporation and the
ratification of the appointment of the Company's independent auditors. Any
broker non-votes will have the same effect as a vote against the amendment to
the Certificate of Incorporation.
The Restated Directors Plan will be approved by shareholders
if approved by a majority of the votes cast on such proposal in person or by
proxy, provided the total votes cast represents more than 50% of all shares
entitled to vote on the matter. Abstentions will not be counted in connection
with the approval of this proposal but will be counted in determining whether
the votes cast represent 50% of the shares entitled to vote. Any broker
non-votes will be disregarded and will have no effect on the outcome of the
proposal.
Shares of Common Stock represented by proxies received in time
for the Annual Meeting will be voted as specified in the submitted proxy, unless
the proxy has previously been revoked. Unless contrary instructions are given,
the proxy will be voted:
(i) FOR the election of the Board of Directors' nominees
for director;
(ii) FOR the amendment to the Certificate of
Incorporation;
(iii) FOR the approval of the Restated Directors Plan; and
(iv) FOR the ratification of the appointment of the
independent auditors.
With respect to any other matters properly submitted to shareholders at the
Annual Meeting, proxies will be voted as recommended by the Board of Directors
or, if no such recommendation is given, in the discretion of the proxy holders.
This year shareholders may vote by using one of three
alternative methods:
(1) by completing and mailing the proxy card; or
(2) via the Internet, by going to the Website
http://www.eproxyvote.com/tlb and following the
instructions for Internet voting on the proxy card;
or
(3) over the telephone, by dialing 1-877-PRX-VOTE
(1-877-779-8683) and following the instructions for
telephone voting on the proxy card.
<PAGE>
A proxy may be revoked, prior to the exercise of the proxy,
either by submitting written notice of revocation of that proxy to the Secretary
or by submitting a new proxy bearing a later date via proxy card, Internet or
telephone. A proxy may also be revoked by voting in person at the Annual
Meeting. Attendance at the Annual Meeting will not in itself constitute
revocation of a proxy.
This proxy solicitation is being made by the Board of
Directors of the Company and the expense of preparing, printing and mailing this
Proxy Statement and proxy is being paid by the Company. In addition to use of
the mails, proxies may be solicited personally, by electronic mail, by facsimile
or by telephone by regular employees of the Company without additional
compensation. The Company will reimburse banks, brokers and other custodians,
nominees and fiduciaries for their costs in sending proxy materials to the
beneficial owners of Common Stock.
If a person is a participant in the Company's 401(k) profit
sharing plan and has Common Stock in a plan account, the proxy also serves as
voting instructions for the plan trustee.
More than a majority of the outstanding shares of Common Stock
of the Company is owned by JUSCO (U.S.A.), Inc., a Delaware corporation ("JUSCO
USA"), which is a wholly owned subsidiary of JUSCO Co., Ltd., a Japanese retail
conglomerate ("JUSCO"). JUSCO USA has advised the Company that it intends to
vote all such shares for the election of the nominees for director named in this
Proxy Statement, for the amendment to the Certificate of Incorporation, for the
approval of the Restated Directors Plan, and for the ratification of the
appointment of the independent auditors.
<PAGE>
ITEM 1
ELECTION OF DIRECTORS
General. Directors will hold office until the next Annual
Meeting or until their successors are chosen and qualified. The Company has
inquired of each nominee and determined that each will serve if elected. In the
event that any of the nominees should become unavailable for election, the
persons named in the accompanying proxy intend to vote for such other person or
persons, if any, as the Board of Directors may designate as a substitute
nominee. The Board of Directors recommends that shareholders vote FOR such
nominees for director.
Set forth below is a brief description of the background of
each nominee for director. All nominees are current directors of the Company,
except for Toshiji Tokiwa and Yoichi Kimura who are new nominees.
Not standing for reelection at this Annual Meeting are Takuya
Okada, who is retiring as Chairman and Chief Executive Officer of JUSCO, and
Eiji Akiyama, who is retiring as Executive Vice Chairman and a Director of
JUSCO. Talbots and all of its associates wish to express their deepest gratitude
for the wisdom and guiding presence of each of these individuals who have
greatly contributed to the Company's success.
At the Board of Directors' April 6, 2000 meeting, Arnold B.
Zetcher, Talbots President and Chief Executive Officer, was appointed to succeed
Takuya Okada as Chairman of the Board, effective at the Annual Meeting. Mr.
Zetcher, as Chairman, President and Chief Executive Officer, will continue his
current responsibilities and the management structure of the Company will not
change as a result.
<PAGE>
ARNOLD B. ZETCHER
Mr. Zetcher, 59, joined the Company as President in 1987. He
has been President, Chief Executive Officer and a Director of the Company since
1988. Mr. Zetcher was Chairman and Chief Executive Officer of John Breuner
Company, a home furnishings division of BATUS, and prior to that, Chairman and
Chief Executive Officer of Kohl's Food Stores, another BATUS division. Mr.
Zetcher also served as Chairman and Chief Executive Officer of Bonwit Teller in
New York and served in various capacities during his 10 years with Federated
Department Stores.
TOSHIJI TOKIWA
Mr. Tokiwa, 60, is a Director of JUSCO and was recently
nominated as Chairman and Chief Executive Officer of JUSCO pending shareholder
approval at JUSCO's annual meeting in May 2000. He was President and Chief
Executive Officer of Chuo Real Estate Co., Ltd. from 1996 to March 2000, and
prior to that, was Senior Managing Director of The Dai-Ichi Kangyo Bank, Ltd.
from 1995 to 1996 and Director and General Manager, New York Branch, of The
Dai-Kangyo Bank, Ltd. from 1993 to 1995.
ELIZABETH T. KENNAN
Ms. Kennan, 62, was elected a Director of the Company in 1993.
Ms. Kennan was the President of Mount Holyoke College from 1978 to 1995, at
which time she became President Emeritus, and served as President of Five
Colleges Incorporated from 1985 to 1994. Ms. Kennan also currently serves as a
Director of The Putnam Funds, Bell Atlantic Corporation and Northeast Utilities.
Ms. Kennan is Chairperson of the Company's Audit Committee and a member of the
Company's Compensation Committee.
YOICHI KIMURA
Mr. Kimura, 55, is Executive General Manager, International
Division, and a Director of JUSCO. Mr. Kimura was Chief Financial Officer and a
Director of JUSCO from 1998 to 1999 and was General Manager, International
Credit Supervision Division, of The Dai-Ichi Kangyo Bank, Ltd. from 1994 to
1998.
H. JAMES METSCHER
Mr. Metscher, 43, joined Talbots as Executive Vice President
and Chief Merchandising Officer in November 1998 and was appointed a Director in
March 1999. Mr. Metscher was employed by Liz Claiborne, Inc. from 1993 to 1996,
first as President of its First Issue Division and later as President of the Liz
Claiborne Retail Division. From 1996 to 1998 he was President and Chief
Executive Officer of The Custom Foot, a venture capital backed specialty
footwear company which was discontinued and liquidated. Mr. Metscher had also
been employed by Talbots from 1984 to 1993, holding positions of increasing
responsibility including Vice President, Merchandising and Vice President,
Product Development.
<PAGE>
MOTOYA OKADA
Mr. Motoya Okada, 48, was elected a Director of the Company in
1993. Mr. Okada has been President of JUSCO since 1997 and was Senior Managing
Director of JUSCO from 1995 to 1997. Mr. Okada also served as Managing Director
of JUSCO from 1992 to 1995 and a Director of JUSCO from 1990 to 1992. Mr. Okada
was President of Talbots Japan Co., Ltd., a subsidiary of JUSCO, from 1990 to
1997. Mr. Okada has been a Director of JUSCO USA since 1992.
ISAO TSURUTA
Mr. Tsuruta, 50, was elected a Director of the Company in
1999. He is currently Senior Vice President of JUSCO USA, a wholly owned
subsidiary of JUSCO. Mr. Tsuruta joined JUSCO in 1989 as Assistant Vice
President of JUSCO USA. Mr. Tsuruta was promoted to Vice President and Deputy
General Manager of JUSCO USA in 1990 and became Senior Vice President of JUSCO
USA in 1996.
MARK H. WILLES
Mr. Willes, 58, has been a Director of the Company since 1988.
He is the Chairman of the Board, President and Chief Executive Officer of The
Times Mirror Company and was Publisher of the Los Angeles Times from 1997 to
1999. Mr. Willes served in various executive management positions at General
Mills, Inc. from 1980 to 1995, including Vice Chairman, President and Chief
Operating Officer, and Executive Vice President and Chief Financial Officer. Mr.
Willes also serves as a Director of Black & Decker Corporation. Mr. Willes is
Chairperson of the Company's Compensation Committee and a member of the
Company's Audit Committee.
Director Compensation; Attendance; Committees. The Chairman of
the Board in the past has received an annual retainer of $50,000, plus expenses;
however, Mr. Zetcher will not receive any separate compensation for his services
as Chairman of the Board. Each other non-employee director, other than Mr.
Tsuruta, receives an annual retainer of $23,000 plus expenses. The chairperson
of each Board committee receives an additional annual retainer of $5,000. Also,
each year, a director who is not an employee of the Company has received an
option to purchase between 3,000 and 5,000 shares of the Company's Common Stock
at an exercise price equal to the fair market value of the Common Stock as of
the date of grant.
In fiscal 1999, the Board of Directors held four meetings, the
Audit Committee held two meetings and the Compensation Committee held one
meeting. There is no standing nominating committee. Each director attended at
least 85% of the meetings of the Board of Directors and of the Committees of
which he or she was a member.
Audit Committee. The Audit Committee functions as a
communication point among non-Audit Committee directors, the independent
auditors, the internal audit personnel and the Company's management as their
respective duties relate to financial accounting, reporting and internal
controls. The Audit Committee assists the Board of Directors in fulfilling its
responsibilities with respect to accounting policies, internal controls,
financial and operating controls, standards of corporate conduct and
performance, reporting practices of the Company and the sufficiency of auditing.
Ms. Kennan (Chairperson) and Mr. Willes are the current members of the Audit
Committee.
<PAGE>
The New York Stock Exchange recently adopted changes in its
listing rules relating to audit committees. One change relates to the
independence of directors named to an audit committee and requires, among other
things, that by June 2001 an audit committee must consist of at least three
independent directors. The Company's Audit Committee currently consists of two
independent directors and the Company will add a third Audit Committee member in
accordance with NYSE requirements.
Compensation Committee. The principal responsibilities of the
Compensation Committee include the determination of compensation for the senior
officers of the Company including salary and incentive based plans,
determination of awards under and administration of the Company's 1993 Executive
Stock Based Incentive Plan, and ongoing review, in consultation with Company
executive management, the Board of Directors, and outside compensation
consultants, of the policies relating to compensation of the Company's senior
officers, with the goal of encouraging superior Company performance. Mr. Willes
(Chairperson) and Ms. Kennan are the current members of the Compensation
Committee.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth
compensation information for the Company's Chief Executive Officer and the other
four most highly compensated executive officers of the Company.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
--------------------------------------- ----------------------------
Number of
Other Annual Restricted Securities All Other
Name and Principal Fiscal Compensation Stock Underlying Compensation
Position Year Salary ($) Bonus ($) ($) Award(s)($)(1) Options (#) ($) (2)
- ------------------------------------ -------- ----------- ----------- -------------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Arnold B. Zetcher, 1999 800,000 972,000 -- -- 100,000 53,009
President and Chief 1998 718,500 814,800 -- 873,348 100,000 32,223
Executive Officer 1997 718,500 195,600 -- -- 90,000 39,827
H. James Metscher, 1999 450,000 340,200 187,802(3) -- 50,000 15,185
Executive Vice President, 1998 136,538 -- -- 387,038 25,000 --
Chief Merchandising
Officer
Edward L. Larsen, Senior 1999 291,246 176,300 -- -- 23,000 18,266
Vice President, Finance, 1998 273,824 160,200 -- 217,597 23,000 11,119
Treasurer and Chief 1997 273,824 37,700 -- -- 20,700 15,620
Financial Officer
Stuart M. Stolper, Senior 1999 288,716 188,400 -- -- 23,000 18,525
Vice President, Human 1998 262,469 171,300 -- 217,597 23,000 10,857
Resources 1997 262,469 39,700 -- -- 20,700 10,557
Richard T. O'Connell, Jr., 1999 243,861 164,600 -- -- 23,000 16,285
Senior Vice President, 1998 223,727 140,900 -- 217,597 23,000 8,156
Legal and Real Estate, and 1997 223,727 33,800 -- -- 20,700 8,896
Secretary
- -----------------
</TABLE>
(1) Restricted stock awards vest in one-third increments beginning three
years from grant date. Holders of restricted stock are entitled to receive
all declared dividends. The number and value of such restricted stock at
the end of fiscal 1999 for each of the executive officers named above is:
Mr. Zetcher, 59,000 shares, $2,035,500; Mr. Metscher, 15,000 shares,
$517,500; Mr. Larsen, 14,700 shares, $507,150; Mr. Stolper, 14,700 shares,
$507,150; and Mr. O'Connell, 14,700 shares, $507,150.
(2) The amounts shown for each executive for fiscal 1999 represent Company
contributions to the Company's Retirement Savings Voluntary Plan and
Supplemental Savings Plan.
(3) Represents (i) relocation costs including selling and moving costs,
temporary housing and purchase-related costs of $106,428 and (ii) tax
reimbursement of $81,374 related to such costs.
<PAGE>
Option Grants in Last Fiscal Year. The table below shows
information regarding grants of stock options made to each of the named
executive officers during fiscal 1999 under the Company's 1993 Executive Stock
Based Incentive Plan. The amounts shown for each of the named executive officers
as potential realizable values are based on arbitrarily assumed annualized rates
of stock price appreciation of five percent and ten percent over the full
ten-year term of the options.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of Stock
Securities Options Price Appreciation For Option
Underlying Granted to Term ($)
Options Employees Exercise or --------------------------------
Granted in Fiscal Base Price Expiration
Name (#) (1) Year ($/Sh) Date 5% 10%
- ------------------------------ --------------- ------------- -------------- -------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arnold B. Zetcher 100,000 18.6 24.8125 3/11/09 1,560,445 3,954,473
H. James Metscher 50,000 9.3 24.8125 3/11/09 780,222 1,977,237
Edward L. Larsen 23,000 4.3 24.8125 3/11/09 358,902 909,529
Stuart M. Stolper 23,000 4.3 24.8125 3/11/09 358,902 909,529
Richard T. O'Connell, Jr. 23,000 4.3 24.8125 3/11/09 358,902 909,529
</TABLE>
(1) Options become exercisable in one-third increments beginning one year
from grant date.
<PAGE>
Option Exercises and Year-End Option Holdings. The following
table shows information regarding option exercises during fiscal 1999 as well as
fiscal 1999 year-end option holdings for each of the named executive officers.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Value of Unexercised
Shares Number of Securities In-the-Money
Acquired on Value Underlying Unexercised Options
Exercise Realized Options at FY-End(#) at FY-End ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---------------------------- -------------- ---------- ---------------------------- ------------------------------
<S> <C> <C> <C> <C>
Arnold B. Zetcher 60,000 1,089,219 469,231/196,667 3,468,463/2,568,132
H. James Metscher -- -- 8,333/66,667 164,056/812,507
Edward L. Larsen 37,324 766,422 83,466/45,234 398,074/590,682
Stuart M. Stolper 30,000 655,362 90,790/45,234 540,747/590,682
Richard T. O'Connell, Jr. 20,000 402,650 100,790/45,234 690,747/590,682
</TABLE>
<PAGE>
Retirement Benefits. The Company has a tax-qualified defined
benefit plan for salaried employees that provides pensions payable at retirement
to each eligible employee. The Company also has a supplemental retirement plan
for certain of its salaried employees that provides generally for the payment of
supplemental benefits equal to that portion of pension benefits earned under the
terms of the pension plan for salaried employees in excess of certain statutory
limits. The amount of an employee's benefits depends on factors including final
average compensation and years of credited service up to thirty years. Benefits
vest after five years of service. The following table sets forth the aggregate
estimated annual retirement benefits as of January 29, 2000 under the two plans.
<PAGE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE ($)
Years of Credited Service
--------------------------------------------------------------
Remuneration 10 20 25 30
- ----------------- ---------------- --------------- --------------- -------------
<S> <C> <C> <C> <C>
300,000 46,512 93,025 116,281 139,537
350,000 54,512 109,025 136,281 163,537
500,000 78,512 157,025 196,281 235,537
750,000 118,512 237,025 296,281 355,537
1,000,000 158,512 317,025 396,281 475,537
1,300,000 206,512 413,025 516,281 619,537
1,700,000 270,512 541,025 676,281 811,537
</TABLE>
The years of credited service under the two plans at January
29, 2000 for Messrs. Zetcher, Metscher, Larsen, Stolper and O'Connell were 12,
11, 9, 22 and 13, respectively. Covered compensation under the pension plan and
the supplemental retirement plan at January 29, 2000 for Messrs. Zetcher,
Metscher, Larsen, Stolper and O'Connell was $1,356,180, $307,020, $405,022,
$391,434 and $331,331, respectively. Covered compensation under the two plans
includes salary and bonus and any amounts deferred under any deferred
compensation plan of the Company. Benefits set forth above are computed on the
basis of a straight life annuity, payable at age 65, and are subject to
deduction for any benefits paid or payable from a predecessor pension plan but
are not subject to deduction for social security.
Employment Agreements and Change in Control Agreements. The
Company has an employment agreement with each of Mr. Zetcher and Mr. Metscher
(an "Executive"). Mr. Zetcher's employment agreement continues until the end of
fiscal 2002 and is renewable for three-year terms thereafter unless at least six
months prior notice of nonrenewal is given. Mr. Metscher's agreement continues
until the end of fiscal 2001 and is renewable for three-year terms thereafter
unless at least six months notice of nonrenewal is given. Neither Executive may
directly or indirectly engage in or carry on any business in competition with
the principal business of the Company for a period of two years after the
termination of employment with the Company if such termination was made by such
Executive without good reason or by the Company for cause.
Mr. Zetcher's agreement provides for his employment as
President and Chief Executive Officer of the Company at a base salary, to be
reviewed annually, of not less than his 1993 base salary. Mr. Zetcher is also
eligible to receive a cash bonus each year pursuant to the Company's Management
Incentive Plan ("MIP"). Mr. Metscher's agreement provides for his employment as
Executive Vice President and Chief Merchandising Officer of the Company at a
base salary, to be reviewed annually, of not less than his 1998 base salary. Mr.
Metscher's agreement also provides for his eligibility to receive a bonus each
year pursuant to the MIP. Mr. Metscher was also entitled to receive certain
amounts in connection with his relocation. Each Executive is also entitled to
certain insurance, retirement and other benefits and to reimbursement of certain
expenses.
<PAGE>
Each of these employment agreements also provides that if the
employment of the Executive is terminated by the Company without "cause" or by
the Executive for "good reason," the Executive will be entitled to a separation
allowance in a single lump sum equal to twice the sum of (i) his annual base
salary at the rate in effect at the time his employment was terminated and (ii)
the annual bonus paid or payable to him for the year immediately prior to the
year in which his employment was terminated. In addition, each Executive would
be entitled to benefits under the executive medical, dental and life insurance
plans of the Company for up to two years subsequent to termination. Each
Executive would also have the right to exercise his vested stock options for a
period of not less than three years from termination.
In the event there is a "change in control" of the Company,
and, within 24 months thereafter, an Executive's employment is terminated either
by the Company without cause or by the Executive for good reason, the Executive
will be entitled to payment of an amount equal to (i) two times the Executive's
annual base salary (equal to the greater of the rate in effect on his
termination date or 180 days prior thereto) and the maximum bonus payable to him
under the MIP in effect as of the last full fiscal year prior to his termination
date, (ii) the maximum bonus payable to the Executive under the MIP for the year
in which the Executive's employment was terminated, pro rated for the portion of
the year in which the Executive was employed, and (iii) three times the present
value of the Executive's accrued benefits under the Company's supplemental
retirement plan as of the date of termination. Any grant of restricted stock
made to the Executive under the Plan will also provide for acceleration of
vesting upon the Executive's termination of employment within 24 months after a
change in control. The Executive would also be entitled to certain insurance and
other benefits for up to two years after termination.
A "change in control" is defined generally to include
significant changes in the stock ownership of the Company and certain changes in
the Company's Board of Directors. "Good reason" is defined generally to include
certain reductions in duties or reporting responsibilities, certain unapproved
relocations, certain reductions in compensation or benefits, and material
breaches of the agreement by the Company. "Cause" is generally defined to
include certain failures to perform, felony conviction, certain conflicts of
interest, repeated acts of material misconduct, and material breaches of the
agreement by the Executive.
The Company also has a change in control agreement with each
of Messrs. Larsen, Stolper and O'Connell and certain other officers. Under each
agreement, if the Company terminates such officer's employment without cause
within twelve months following a "change in control", the Company will pay to
such officer an amount equal to the sum of (i) such officer's annual base salary
at the rate in effect on the date of termination, and (ii) an amount calculated
in accordance with a formula which takes into account such officer's annual base
salary, the job level and performance of such officer, and the financial
performance of the Company. In addition, each officer would be entitled to
certain insurance and other benefits for up to one year after termination.
<PAGE>
Report on Compensation of Executive Officers
Compensation matters for the Company's executive officers for
fiscal 1999 were reviewed and approved by the Compensation Committee of the
Board of Directors.
The overall objective of the Company's executive compensation
program is to attract and retain the highest quality executives to manage and
lead the Company, and to provide annual and long term incentives to management,
based on both Company performance and individual performance, in order to build
and sustain value for shareholders.
The Company's compensation program for its executive officers
consists of three basic components: base salary, annual incentive compensation,
and stock-based compensation.
In order to assess the general competitiveness of its overall
pay structure for senior management, at regular intervals the Company obtains
published data of compensation practices of the retail industry from independent
compensation consultants and trade group publications. From this published data
the Company compares positions of similar size, scope and complexity. The
companies included in such published surveys of the general retail industry
include both apparel and nonapparel companies (the "retail survey group") and
represent a broader range and are not necessarily the same retail companies as
included in the Peer Group Index of selected retail apparel companies set forth
in the Performance Graph below.
Base Salary. Base salary increases effective for fiscal 1999
for the Company's executive officers other than the Chief Executive Officer were
initially established by the Chief Executive Officer, subject to review and
ratification by the Compensation Committee, based on his evaluation and
assessment of each individual's level of responsibility and performance over the
previous year. Such increases were also targeted such that annual base pay for
these executives could be approximately at or near the 50th percentile range of
base pay of the retail survey group for positions of similar size, scope and
complexity. The Chief Executive Officer's base salary increase for fiscal 1999
was established by the Compensation Committee by equal reference to relative
Company performance and his individual performance in leading the Company as
assessed and evaluated by the Compensation Committee. The evaluation and
assessment of the Chief Executive Officer's individual performance, which by its
nature was subjective, took into account the Company's earnings and financial
results, the Company's ongoing geographical expansion of stores and selling
space and the continuing development of new business concepts. The base salary
of the Executive Vice President, Chief Merchandising Officer was initially
established at the time of his hire in 1998 and pursuant to his employment
agreement may not be less than his 1998 base salary.
Management Incentive Plan. The Company believes that a
substantial percentage of each executive officer's compensation should be tied
directly to the financial performance of the Company as well as to the
executive's individual performance. Annual incentive compensation for fiscal
1999 for executive officers including the Chief Executive Officer was determined
pursuant to the MIP. Cash incentive awards under the MIP are made annually to
those management employees who are in certain established position levels within
the Company including all executive officers.
<PAGE>
Awards granted pursuant to the MIP are based on a Company
financial performance rating and an individual performance rating. For fiscal
1999 the Company performance rating was based on the Company's earnings per
share in relation to a pre-established earnings per share target. The individual
performance rating was based on a subjective evaluation and assessment of each
individual's performance during the fiscal year measured against his or her
responsibilities for the year.
Company target performance ratings for fiscal 1999 against the
pre-established earnings per share goal ranged from zero to 1.8 and individual
target performance ratings for fiscal 1999 ranged from zero to 1.5. These
ratings are then combined with the participant's target incentive participation
rate which is a percentage of base salary based on position level, and for
fiscal 1999 ranged from 25% for certain executive officers up to 45% for the
Chief Executive Officer. The weights assigned were 50% for Company performance
and 50% for individual performance.
For fiscal 1999 MIP awards, the Company's actual performance
rating against the earnings per share goal, which was internally established for
MIP purposes, was 1.8. The Chief Executive Officer made recommendations to the
Compensation Committee on the individual performance ratings for all executive
officers other than himself. The Compensation Committee then reviewed and
finally approved the 1999 individual performance ratings for all executive
officers including the Chief Executive Officer. Individual performance ratings
for the executive officers named in the Summary Compensation Table averaged 1.44
for fiscal 1999.
Stock-Based Compensation. The Board of Directors and the
Compensation Committee are each of the view that stock ownership or its
equivalent by management serves to align the interests of management with
interests of the Company's shareholders. Stock options are granted at fair
market value at the time of grant and are intended to align executive
compensation opportunities with shareholder returns. Stock options are intended
to provide long-term compensation, and future grants of options or other awards
will be periodically reviewed and determined by the Compensation Committee.
Stock options granted during fiscal 1999 were made at levels determined to be
approximately the median for annual stock grants of a group of certain retail
companies considered by the Compensation Committee and its outside compensation
consultant.
<PAGE>
Compliance with Internal Revenue Code Section 162(m). Section
162(m) of the Internal Revenue Code generally disallows a deduction to publicly
traded companies to the extent of excess compensation over $1 million paid to
the chief executive officer or to any of the four other most highly compensated
executive officers. Qualifying performance based compensation will not be
subject to the deduction limit if certain requirements are met. The Company does
not believe that Section 162(m) deduction limits for fiscal 1999 will be
material in terms of net financial effect or number of persons covered and
therefore the Company does not intend to restructure fiscal 2000 compensation
arrangements. The Company and the Compensation Committee will continue to
monitor this matter.
Compensation Committee
of the Board of Directors
Mark H. Willes, Chairperson
Elizabeth T. Kennan
<PAGE>
Performance Graph
The following graph compares the percentage change in the
cumulative total shareholders' return on the Company's Common Stock on a
year-end basis, using the last day of trading prior to the Company's fiscal
year-end, from January 27, 1995 to January 28, 2000, with the cumulative total
return on the Standard & Poor's 500 Stock Index and the Dow Jones Retailers-All
Specialty Index for the same period. In accordance with the rules of the SEC,
the returns are indexed to a value of $100 and assume that all dividends were
reinvested.
Comparison of Year-End Cumulative Total Return of Talbots, Standard &
Poors 500 Index, and Dow Jones Retailers-All Specialty Index
<TABLE>
<CAPTION>
1/27/95 2/2/96 1/31/97 1/30/98 1/29/99 1/28/00
-------------- --------------- --------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
The Talbots, Inc. 100 92 93 47 94 119
Standard & Poors 500 100 139 175 222 294 333
Dow Jones Retailers Index - All Specialty 100 105 125 190 332 308
</TABLE>
Compensation Committee Interlocks and Insider Participation.
The Compensation Committee of the Board of Directors is comprised of two outside
independent directors, Mark H. Willes and Elizabeth T. Kennan.
Mr. Zetcher, President, Chief Executive Officer and a director
of the Company, is a director of Revman Industries Inc., a subsidiary of JUSCO
USA.
Certain Transactions with Related Parties. In connection with
the Company's 1993 initial public offering, the Company, through its wholly
owned subsidiary The Classics Chicago, Inc. ("Classics Chicago"), purchased the
Talbots trade name and certain other trademarks (the "Trademarks") in all
countries of the world other than Australia, New Zealand, Japan, China and
certain other Asian countries (the "Territory") from JUSCO (Europe) B.V. ("JUSCO
(Europe)"), a subsidiary of JUSCO. Under the trademark purchase agreement and a
license agreement with Classics Chicago, the Company also obtained the
non-exclusive right to manufacture products bearing the Trademarks outside the
Territory for export to the Territory and, for a royalty equal to 1% of net
catalog sales outside the Territory, to distribute catalogs bearing the
Trademarks and to make catalog sales to customers of the Company outside the
Territory. Such catalog license may be terminated by JUSCO (Europe) at any time
with four months prior written notice. Talbots Japan Co., Ltd. ("Talbots
Japan"), a subsidiary of JUSCO, is the non-exclusive licensee of the Trademarks
within Japan and other countries outside the Territory. Under the trademark
purchase agreement, JUSCO (Europe) retains the right in its discretion to
disapprove the assignment by Classics Chicago of any rights in the Trademarks in
the Territory to any party. Such retained right may be purchased by Classics
Chicago at its option should JUSCO (Europe) attempt to sell or otherwise
transfer such retained right to a third party or should JUSCO (Europe) and its
affiliates cease to own a majority of the Company's voting stock. The purchase
price to Classics Chicago of such retained right will be the lesser of the fair
market value of such retained right on the date of exercise of the option or
$2.0 million. Classics Chicago licenses the right to use the Trademarks to the
Company and its other subsidiaries.
<PAGE>
The Company has a services agreement with Talbots Japan under
which the Company renders services, primarily in the merchandising and import
operation areas, as requested by Talbots Japan on a cost reimbursement basis. At
January 29, 2000, the amount due from Talbots Japan under this services
agreement was approximately $318,063. In addition, at January 29, 2000,
approximately $7,984,959 was due to the Company from Talbots Japan for
merchandise purchases. The Company also realizes certain net expenses from time
to time in the course of its merchandising and sales relationship with Talbots
Japan which are not material in amount. During fiscal 1999, the Company also
made its merchandising and store management information systems available to
Talbots Japan. The Company charges back to Talbots Japan all one time and
ongoing costs related to this project. At January 29, 2000, the amount due from
Talbots Japan under this arrangement was $129,922.
Since February 1995 the Company has had a stock repurchase
program under which the Company repurchases shares from the open market from
time to time and, concurrently with such open market purchases, the Company has
purchased a pro rata number of shares from JUSCO USA so as to maintain
substantially the same percentage stock ownership of the Company between JUSCO
USA and the public shareholders. During the 1999 fiscal year a total of 599,580
shares were repurchased from JUSCO USA. The price of the shares purchased from
JUSCO USA was equal to the weighted average price of the shares paid to the
public shareholders.
JUSCO USA, the Company and its domestic subsidiaries entered
into a tax allocation agreement at the time of the Company's 1993 IPO for the
allocation of (1) consolidated federal income tax liability and any similar
state or local taxes, and (2) all other taxes. Under the agreement, JUSCO USA,
the Company and its domestic subsidiaries would generally share the consolidated
federal income tax liability and liability for similar state and local taxes in
accordance with their election for earnings and profits purposes. However, the
allocation would only be applicable as to any year in which JUSCO USA owned at
least 80% of the Common Stock of the Company and since the date of the 1993 IPO,
JUSCO USA has owned significantly less than 80% of the Company's Common Stock.
See "Beneficial Ownership of Common Stock."
<PAGE>
Concurrently with the Company's 1993 IPO, JUSCO USA entered
into a shareholder's agreement with the Company pursuant to which the Company
agreed, subject to certain limitations, to provide JUSCO USA with one demand
registration right per year, upon exercise of which the Company would be
obligated to register under the Securities Act of 1933, as amended (the
"Securities Act") and applicable state securities law, at the expense of JUSCO
USA, some or all of the Company's Common Stock beneficially owned by JUSCO USA.
The agreement also provides that if the Company proposes to register shares of
Common Stock under the Securities Act for its own account, then JUSCO USA has a
right to request that the Company register JUSCO USA's shares of the Company's
Common Stock. JUSCO USA will bear the incremental cost of registering its shares
in any such offering. If JUSCO USA's shares of the Company's Common Stock are
not included in two registrations of shares of Common Stock by the Company for
the Company's own account due to the judgment of the managing underwriter to
exclude JUSCO USA's shares, the Company will file an additional registration
statement to register JUSCO USA's shares, and expenses incurred in connection
with such additional registration will be paid by the Company. The Company and
JUSCO USA will indemnify each other against certain liabilities under the
Securities Act in connection with any such registration statements.
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
Certain Beneficial Owners. The following table sets forth
certain information as to beneficial ownership of each person known to the
Company to own beneficially more than 5% of the outstanding Common Stock of the
Company as of March 30, 2000. Such beneficial owner has sole voting and
investment power as to such shares unless otherwise indicated.
<TABLE>
<CAPTION>
Beneficial Owner Number of Shares Percent of Class
- ---------------- ---------------- ----------------
<S> <C> <C>
JUSCO (U.S.A.), Inc. 18,821,629 61.3%
520 Madison Ave.
New York, NY 10022
AMVESCAP PLC (1) 2,309,800 7.5%
11 Devonshire Square
London EC2M 4YR
England
</TABLE>
(1) Pursuant to a Schedule 13G dated February 4, 2000 and filed with the SEC by
AMVESCAP PLC on behalf of itself and its subsidiaries AVZ, Inc., AIM Management
Group Inc., AMVESCAP Group Services, Inc., INVESCO, Inc., INVESCO North American
Holdings, Inc., INVESCO Capital Management, Inc., INVESCO Funds Group, Inc.,
INVESCO Management & Research, Inc., INVESCO Realty Advisers, Inc. and INVESCO
(NY) Asset Management, Inc. (collectively, "AMVESCAP"), AMVESCAP has shared
voting power and shared dispositive power with respect to 2,309,800 shares.
Stock Ownership of Directors and Executive Officers. The
following table sets forth certain information as to beneficial ownership of the
outstanding Common Stock of the Company as of March 30, 2000 by each director
and nominee of the Company, each of the individuals listed in the Summary
Compensation Table, and all executive officers and directors of the Company as a
group. Except as otherwise indicated, all persons listed below have sole voting
and investment power with respect to such shares. No director, nominee or
executive officer beneficially owns more than one percent of the total
outstanding Common Stock except that Mr. Zetcher and all directors and executive
officers as a group would be deemed to own beneficially 2.1% and 5.2%,
respectively, of the outstanding Common Stock.
<TABLE>
<CAPTION>
No. of Shares of
Common No. of Shares of
Name of Beneficial Owner Stock(1)(2) Name of Beneficial Owner Common Stock (1)(2)
- ---------------------------------------- ------------------- ------------------------------------- -------------------
<S> <C> <C> <C>
T. Okada*.......................... 34,999 A.B. Zetcher...................... 654,451
E. Akiyama*........................ 11,000 H.J. Metscher..................... 42,798
T. Tokiwa.......................... -- E.L. Larsen....................... 123,499
E.T. Kennan........................ 350 S.M. Stolper...................... 131,830
Y. Kimura.......................... -- R.T. O'Connell, Jr................ 140,526
M. Okada........................... 11,000
I. Tsuruta......................... --
M. H. Willes....................... 16,999 All executive officers and
directors as a group(3)........... 1,673,467
</TABLE>
* Mr. Okada and Mr. Akiyama are retiring and are not standing for reelection.
<PAGE>
(1) The shares listed include shares of restricted stock granted, and subject to
forfeiture, under the Company's 1993 Executive Stock Based Incentive Plan, as
follows: Mr. Zetcher, 59,000; Mr. Metscher, 15,000; Mr. Larsen, 14,700; Mr.
Stolper, 14,700; Mr. O'Connell, 14,700; and all executive officers as a group,
188,300. The listed shares also include shares subject to currently exercisable
stock options, as follows: Mr. T. Okada, 14,999; Mr. Zetcher, 535,897; Mr.
Akiyama, 9,000; Mr. M. Okada, 9,000; Mr. Willes, 11,999; Mr. Metscher, 24,999;
Mr. Larsen, 98,799; Mr. Stolper, 106,123; Mr. O'Connell, 116,123; and all
executive officers and directors as a group, 1,316,666.
(2) Messrs. T. Okada, E. Akiyama, T. Tokiwa, M. Okada and Y. Kimura are
directors or officers or both of JUSCO and/or JUSCO USA and Mr. Tsuruta is an
officer of JUSCO USA. Each disclaims beneficial ownership of the Common Stock of
the Company owned by JUSCO USA and such shares are not included in their
individual share ownership.
(3) Includes 650 shares held by immediate family members, as to which shares
beneficial ownership is disclaimed.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's executive officers and directors to file reports regarding
ownership of the Company's Common Stock with the SEC, and to furnish the Company
with copies of all such filings. Based on a review of these filings, the Company
believes that all filings were timely.
<PAGE>
ITEM 2
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors is recommending to the shareholders
that the Company's Certificate of Incorporation be amended to increase the
number of authorized shares of Common Stock to 100 million shares. The Board of
Directors believes that this amendment to the Certificate of Incorporation is in
the best interests of the Company and its shareholders and recommends the
approval of this proposal. The proposed amendment is set forth in Exhibit A. If
approved by shareholders at the Annual Meeting, the proposed amendment would
become effective upon filing with the Secretary of State of Delaware, which will
occur promptly following the Annual Meeting.
The authorized Common Stock of the Company currently consists
of 40 million shares, par value $.01 per share. As of the record date there were
30,710,182 shares issued and outstanding and 5,374,322 treasury shares. Of the
shares of Common Stock available for issuance as of the record date, 4,702,328
shares were reserved for issuance pursuant to the 1993 Executive Stock Based
Incentive Plan (of which options for 3,674,949 shares and restricted stock for
216,800 shares were currently outstanding) and an additional 106,001 shares were
reserved for issuance pursuant to the directors stock plan (of which options for
86,001 were currently outstanding). If the proposed Restated Directors Plan
included in this Proxy Statement is approved by the shareholders, then an
additional 400,000 shares would be reserved for issuance under such plan.
The Board of Directors believes that the availability of such
additional authorized Common Stock will provide the Company with the flexibility
to issue Common Stock for possible future stock splits or stock dividends, if
such action is determined by the Board of Directors to be advisable, or in
connection with acquisitions, equity incentive plans, financings or other
corporate purposes which may be identified in the future by the Board of
Directors, without the possible expense or delay of a special shareholders'
meeting. Upon issuance, such shares of Common Stock will have the same rights as
the outstanding shares of Common Stock. Issuance of additional shares of Common
Stock may have a dilutive effect on existing holders of Common Stock. Holders of
Common Stock have no preemptive rights.
The increased authorized shares of Common Stock would be
available for issuance at such times and for such corporate purposes as the
Board of Directors may deem advisable, without further action by the Company's
shareholders except as may be required by applicable law or by the rules of the
New York Stock Exchange or any other stock exchange or national securities
association trading systems on which the securities may then be listed or
traded.
The proposed increase in the authorized Common Stock is not
designed to have an antitakeover effect. However, although the Board of
Directors has no present intention of doing so, it could issue shares of Common
Stock (within the limits imposed by applicable law and by the rules of
applicable self-regulatory organizations) which could, depending upon the
circumstances, make more difficult or discourage an attempt to obtain control of
the Company by means of a merger, tender offer, proxy contest or other means,
including sale or issuance to persons favorable to the Board of Directors or
management or otherwise having the effect of diluting the stock ownership of a
person or entity, and thereby protect the continuity of present management. The
Company currently has no firm plans or commitments involving the issuance of
Common Stock, other than under its equity incentive plans.
<PAGE>
The Board of Directors recommends that the shareholders vote
FOR approval of the amendment to the Certificate of Incorporation.
ITEM 3
APPROVAL OF AMENDED AND RESTATED DIRECTORS STOCK PLAN
The Company's shareholders are being asked to approve the
amended and restated directors stock plan (the "Restated Directors Plan"), which
plan was initially adopted in 1995 (the "1995 Plan").
A total of 130,000 shares of Common Stock was initially
authorized under the 1995 Plan, of which only 20,000 shares currently remain
available for future grants of options or other awards. The number of authorized
plan shares is proposed to be increased by 400,000 shares. Therefore, if
approved by the shareholders at the Annual Meeting, a total of 420,000 shares
would be currently available for future awards under the Restated Directors
Plan. Shares issued under the Restated Directors Plan will be either authorized
but unissued shares, treasury shares, or a combination thereof.
Shares subject to forfeiture or expired awards or awards
settled in cash or otherwise terminated without issuance of shares and shares
withheld by or surrendered to the Company to satisfy tax withholding obligations
or in payment of the exercise price of an option will be deemed available for
new awards under the Restated Directors Plan.
The material changes from the 1995 Plan are (i) allowing for
the grant of stock awards as described below; (ii) expressly providing for the
right of a director to tender shares or to have shares withheld for satisfaction
of tax withholding obligations; (iii) providing the Board of Directors with the
discretion to amend from time to time the schedule of directors receiving
options under the plan as well as the amount, timing, vesting and exercise
period of such options; and (iv) providing that in the event of a "change in
control" of the Company, in addition to the assumption or substitution of
unvested options by a successor corporation, all unvested options would
immediately vest and all restrictions on any stock awards would lapse.
A general discussion of the principal terms of the Restated
Directors Plan is set forth below. This discussion is qualified in its entirety
by the full text of the plan, which is attached to this Proxy Statement as
Exhibit B.
Eligibility for Participation. Each member of the Board of
Directors of the Company who is not an employee of the Company is eligible to
receive awards under the Restated Directors Plan. There are currently six
directors who are eligible to receive awards under the Restated Directors Plan.
<PAGE>
Administration and Amendment. The Board of Directors has sole
authority to administer the Restated Directors Plan, which includes interpreting
the terms of the plan and awards under the plan and establishing any rules and
regulations relating to the plan. The Restated Directors Plan may be amended or
suspended in whole or in part at any time and from time to time by the Board of
Directors, but no amendment shall be effective unless the same is approved by
the Company's shareholders if such shareholder approval is required by law, rule
or regulation.
Non-Qualified Stock Options. Awards under the Restated
Directors Plan include non-qualified stock options. Options may not be granted
with an exercise price less than the fair market value of the Common Stock on
the grant date. As of April 7, 2000, the composite price of the Common Stock on
the New York Stock Exchange was $60.625 per share. Options generally may not be
exercisable before the first anniversary of the date granted or after ten years
from the date granted, unless otherwise determined by the Board of Directors.
Options may be exercised by payment of cash, delivery of Common Stock or a
combination thereof. The Board in its discretion determines the amount of shares
subject to options as well as the timing of grants and the vesting and exercise
periods of options granted under the plan. Unless otherwise determined by the
Board of Directors in its discretion from time to time, non-employee directors
receive options each year for between 3,000 and 4,000 shares.
Stock Awards. Under the Restated Directors Plan, the Board of
Directors may in its discretion from time to time grant stock awards to the
non-employee directors, including shares without restriction, restricted shares,
performance shares and deferred shares. The Board of Directors would determine
the number of shares to be subject to any such stock award and the terms,
conditions and any restrictions of such stock award.
The table below sets forth the determinable number of awards
to be received under the plan.
NEW PLAN BENEFITS
-----------------
Name and Position Number of Options*
- ----------------- ------------------
Non-Executive Director Group (6 members)........................20,000 shares**
* Stock awards granted under the plan are discretionary and cannot therefore
be determined.
** Current annual aggregate of options granted under the plan, subject to the
discretion of the Board of Directors.
Change in Control. In the event of any transaction involving
the liquidation, dissolution, merger or consolidation in which the Company is
not the surviving corporation, or the sale or disposition of all or
substantially all of the Company's assets, all unvested options would
immediately vest and all restrictions on any stock awards would immediately
lapse and, in addition, provision would be made for the assumption by any
successor corporation of all outstanding options or the substitution of new
options by any successor corporation or, in the discretion of the Board of
Directors and subject to the terms of the Restated Directors Plan, the Restated
Directors Plan and such awarded options would be terminated and provision would
be made for the payments to the participants of an amount equal to the fair
market value of a share multiplied by the number of shares subject to the
unexercised options less the exercise price for such options.
<PAGE>
Adjustment. In the event of any change in the Company's
outstanding Common Stock by reason of a stock split, stock dividend, split-up,
recapitalization, merger, consolidation, rights offering, reorganization,
combination or exchange of shares, a sale of all or part of the Company's
assets, a distribution to shareholders other than a normal cash dividend, or
other extraordinary or unusual event, the number and kinds of shares that may be
issued under the Restated Directors Plan and all outstanding options and stock
awards shall be adjusted by the Board of Directors so that the proportionate
interest of the holder shall be maintained as before the occurrence of such
event.
Certain Federal Tax Consequences. The following is a brief
description of the federal income tax consequences arising with respect to
awards that may be granted under the Restated Directors Plan. The law is highly
technical and complex and the following represents only a general summary.
The grant of an option will create no federal income tax
consequences for the participant or the Company. Upon exercising an option, the
participant must generally recognize ordinary income equal to the difference
between the exercise price and the fair market value of the shares acquired on
the date of exercise. The Company generally will be entitled to a deduction
equal to the amount recognized as ordinary income by the participant in
connection with the exercise of an option.
With respect to other awards under the plan that result in a
transfer to the participant of shares that either are not restricted as to
transferability or not subject to a substantial risk of forfeiture, the
participant must generally recognize ordinary income equal to the fair market
value of shares actually received. The Company generally will be entitled to a
deduction for the same amount. With respect to awards involving shares that are
restricted as to transferability and subject to substantial risk of forfeiture,
the participant must generally recognize ordinary income equal to the fair
market value of the shares or other property received at the earliest time the
shares or other property become transferable or not subject to a substantial
risk of forfeiture. The Company generally will be entitled to a deduction in an
amount equal to the ordinary income recognized by the participant.
The Board of Directors recommends that shareholders vote FOR
approval of the Restated Directors Plan.
<PAGE>
ITEM 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP as
the Company's independent auditors to make an examination of the accounts of the
Company for the 2000 fiscal year. Deloitte & Touche LLP has served as the
Company's independent auditors since 1988. Representatives of Deloitte & Touche
LLP are expected to be present at the Annual Meeting and will be available to
respond to appropriate questions and to make such statements as they may desire.
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the
Company's 2001 Annual Meeting of Shareholders must be received by the Secretary
of the Company, for inclusion in the Company's proxy statement, notice of
meeting and proxy relating to the 2001 Annual Meeting, not later than December
27, 2000.
The Company's Bylaws establish an advance written notice
procedure for shareholders seeking to nominate candidates for election as
directors at any annual meeting of shareholders, or to bring business before an
annual meeting of shareholders of the Company. The Bylaws provide that only
persons who are nominated by or at the direction of the Board, or by a
shareholder who has given timely written notice to the Secretary of the Company
prior to the meeting at which directors are to be elected, will be eligible to
be considered for election as directors of the Company. The Bylaws also provide
that at any meeting of shareholders only such business may be conducted as has
been brought before the meeting by or at the direction of the Board or, in the
case of an annual meeting of shareholders, by a shareholder who has given timely
written notice to the Secretary of the Company of such shareholder's intention
to bring such business before the meeting. Under the Bylaws, for any such
shareholder notice to be timely, such notice must be received by the Company in
writing not less than 60 days nor more than 90 days prior to the meeting, or in
the event that less than 70 days' notice or prior public disclosure of the date
of the annual meeting is given or made to shareholders, to be timely, notice by
the shareholder must be received not later than the close of business on the
10th day following the day on which such notice of the date of the meeting or
such public disclosure was made. Under the Bylaws, a shareholder's notice must
also contain certain information specified in the Bylaws.
Shareholders, upon written request to the Investor Relations
Department of the Company, 175 Beal Street, Hingham, Massachusetts 02043, may
receive, without charge, a copy of the Company's Annual Report on Form 10-K,
including the financial statements, financial statement schedules and list of
exhibits, required to be filed with the SEC for the 1999 fiscal year.
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of
no business that will be presented for consideration at the Annual Meeting other
than the items referred to above. Proxies in the enclosed form will be voted in
respect of any other business that is properly brought before the Annual Meeting
as recommended by the Board of Directors or, if no such recommendation is given,
in the discretion of the proxy holders.
<PAGE>
Exhibit A
AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
THE TALBOTS, INC.
Article FOURTH of the Company's Certificate of Incorporation,
as amended, shall be amended as follows:
"FOURTH. The total number of shares which the
corporation shall have authority to issue is 100 million
shares of Common Stock, and the par value of each such share
is $.01."
<PAGE>
Exhibit B
THE TALBOTS, INC.
RESTATED DIRECTORS STOCK PLAN
(as amended through May 25, 2000)
1. Purpose. The purpose of The Talbots, Inc. Restated Directors Stock Plan
(the "Plan") is to advance the interests of The Talbots, Inc. (the
"Company") and its shareholders by encouraging increased share
ownership by certain members of the Board of Directors of the Company
(the "Board") in order to promote long-term shareholder value through
continuing ownership of the Company's common shares.
2. Administration. The Plan shall be administered by the Board. The Board
shall have all the powers vested in it by the terms of the Plan, such
powers to include authority (within the limitations described herein)
to prescribe the form of the agreement embodying awards of nonqualified
stock options ("Options") and awards of shares of common stock of the
Company ("Stock Awards") made under the Plan. The Board shall, subject
to the provisions of the Plan, have the right to grant Options and make
Stock Awards under the Plan and shall have the power to construe the
Plan, to determine all questions arising thereunder and to adopt, amend
and revoke such rules and regulations for the administration of the
Plan as it may deem desirable. Any decisions of the Board in the
administration of the Plan, as described herein, shall be final and
conclusive. The Board authorizes each of the President and Chief
Executive Officer, the Chief Financial Officer or the Senior Vice
President, Human Resources (or any other officer of the Company as any
such officer may designate from time to time) to execute and deliver
documents on behalf of the Board. No member of the Board shall be
liable for anything done or omitted to be done by him or her or by any
other member of the Board in connection with the Plan, except for his
or her own willful misconduct and except as otherwise expressly
provided by statute. All members of the Board shall be indemnified by
the Company with respect to any action, determination or interpretation
in connection with the Plan to the fullest extent permitted by law.
3. Participation. Each member of the Board who is not an employee of the
Company (an "Eligible Director") shall be eligible to receive Options
and/or Stock Awards under the Plan.
4. Awards under the Plan.
(a) Type of Awards. Awards under the Plan shall include only (i)
Options, which are rights to purchase shares of common stock
of the Company ("common shares"), subject to the terms,
conditions and restrictions specified in Paragraph 5 below and
(ii) Stock Awards for common shares, which may be issued
subject to the terms and conditions specified in Paragraph 6
below.
<PAGE>
(b) Maximum Number of Shares That May be Issued. There may be
issued under the Plan pursuant to the exercise of Options
and/or as Stock Awards an aggregate of not more than 530,000
common shares, subject to adjustment as provided in Paragraph
7 below. If any Option or Stock Award is cancelled or
terminates, or if any Option expires unexercised, in whole or
in part, any common shares that would otherwise have been
issuable pursuant thereto will be available for issuance under
new awards, to the extent permitted by Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"). In addition, to the extent permitted by Rule 16b-3, the
holder of an award hereunder shall have the right to have
withheld or to tender any common shares to the Company in
connection with the payment of the exercise price of an Option
or the withholding of federal, state or local income taxes or
other taxes upon the exercise of any Option or upon the making
or vesting of any Stock Award, and any such common shares so
withheld or tendered will be available for issuance of new
awards under the Plan.
(c) Reservation of Shares. The Company shall reserve for purposes
of the Plan that number of common shares described in
Paragraph 4(b) above, from its authorized but unissued common
shares or from common shares held in the Company's treasury or
partly from each. No fractional shares shall be issued with
respect to Options or Stock Awards.
(d) Rights with Respect to Shares. An Eligible Director to whom an
Option or Stock Award is granted or made (and any person
succeeding to such Eligible Director's rights under the Plan)
shall have no rights as a shareholder with respect to any
common shares issuable pursuant to any such Option or Stock
Award until the date of the issuance of a stock certificate
for such shares. Except as provided in Paragraph 7 below, no
adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in
cash, securities or other property) for which the record date
is prior to the date such stock certificate is issued.
5. Non-Qualified Stock Options. Each Option granted under the Plan shall
be evidenced by an agreement in such form as the Board shall prescribe
from time to time in accordance with the Plan and shall comply with the
following terms and conditions:
(a) The Option exercise price shall be the fair market value of
the common shares subject to such Option on the date the
Option is granted, which shall be the closing composite price
on the New York Stock Exchange of a common share on the date
of grant as reported in The Wall Street Journal or, if the New
York Stock Exchange is closed on that date, on the last
preceding date on which the New York Stock Exchange was open
for trading; but in no event will such Option exercise price
per share be less than the par value of a common share.
(b) On and as of June 1 each year and/or at such other date or
dates as may be determined by the Board from time to time,
each Eligible Director shall be granted and shall receive an
Option for the number of common shares set forth opposite such
person's name on Schedule 1 hereof or such other number of
shares or such other date or dates as may be determined by the
Board from time to time. The issuance of Options under this
paragraph is subject to there being sufficient available
shares in such year under Paragraph 4(b). Schedule 1 may be
amended by the Board from time to time to reflect any
successor or additional directors or to change the number of
common shares awarded to any existing, successor or additional
directors.
<PAGE>
(c) The Option shall not be transferable by the optionee otherwise
than by will or the laws of descent and distribution, and
shall be exercisable during the optionee's lifetime only by
the optionee.
(d) Unless otherwise determined by the Board from time to time in
its discretion, the Option shall not be exercisable:
(i) before the expiration of one year from the date it is
granted or after the expiration of ten years from the
date it is granted, and may be exercised during such
period as follows: one-third (33 1/3%) of the total
number of common shares covered by the Option shall
become exercisable each year beginning with the first
anniversary of the date it is granted, provided that
if an Eligible Director ceases to be a director for
any reason, any Option then held by such person shall
automatically become immediately exercisable in full
on the date when such Eligible Director ceases to be
such director;
(ii) unless notice in writing signed by the optionee (or
other person then entitled to exercise such Option)
is delivered to the Secretary of the Company stating
that such Option, or a specified portion thereof, is
being exercised;
(iii) unless payment in full is made for the common shares
being acquired thereunder at the time of exercise,
such payment to be made
(A) in United States dollars by cash or check,
or
(B) in lieu thereof, by tendering to the Company
common shares owned by the person exercising
the Option and having a fair market value
equal to the cash exercise price applicable
to such Option exercise, such fair market
value to be the closing composite price on
the New York Stock Exchange of a common
share on the last trading date preceding the
date of exercise, as reported in The Wall
Street Journal, or
(C) by a combination of United States dollars
and common shares as aforesaid; and
(iv) unless the person exercising the Option has been, at
all times during the period beginning with the date
of grant of the Option and ending on the date of such
exercise, an Eligible Director of the Company, except
that
<PAGE>
(A) if such person shall cease to be an Eligible
Director for reasons other than death while
holding an Option that has not expired and
has not been fully exercised, such person,
at any time within three months of the date
he or she ceased to be such an Eligible
Director (but in no event after the Option
has expired under the provisions of
subparagraph 5(d)(i) above) may exercise any
remaining unexercised portion of such Option
to the extent vested as of the date such
person ceased to be such Eligible Director,
or
(B) if any person to whom an Option has been
granted shall die holding an Option that has
not expired and has not been fully
exercised, his or her executors,
administrators, heirs or distributees, as
the case may be, may at any time within one
year after the date of such death (but in no
event after the Option has expired under the
provisions of subparagraph 5(d)(i) above)
exercise any remaining unexercised portion
of such Option to the extent vested as of
the date of such death.
6. Stock Awards. The Board shall have the right, in its discretion from
time to time, to make Stock Awards to Eligible Directors, including
without limitation awards of shares without restriction, restricted
shares, performance shares and deferred shares. The Board shall
determine the number of common shares to be issued to an Eligible
Director under any Stock Award and all of the terms, conditions and
restrictions, if any, under such Stock Award. The par value of the
common shares so awarded may be paid by the Company on behalf of such
Eligible Director. Each Stock Award under the Plan shall be evidenced
by an instrument in such form and with such terms, conditions and
restrictions, if any, as the Board may approve from time to time in
accordance with the Plan.
7. Dilution and Other Adjustments.
(a) In the event of any change in the outstanding common shares of
the Company by reason of any stock split, stock dividend,
split-up, recapitalization, merger, consolidation, rights
offering, reorganization, combination or exchange of shares, a
sale by the Company of all or part of its assets, any
distribution to shareholders other than a normal cash
dividend, or other extraordinary or unusual event, the number
or kind of shares that may be issued under the Plan, and all
outstanding Options and Stock Awards, shall be adjusted by the
Board so that the proportionate interest of the holder shall
be maintained as before the occurrence of such event. Such
adjustments by the Board shall be conclusive and binding for
all purposes of the Plan.
<PAGE>
(b) In the event of a transaction involving (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving corporation, or (iii)
the sale or disposition of all or substantially all of the
Company's assets, all unvested Options shall immediately vest
and all restrictions on any Stock Awards shall immediately
lapse and, in addition, provision shall be made in connection
with such transaction for the assumption of all outstanding
Options by any successor corporation, or the substitution for
such Options of new options of any successor corporation, with
appropriate adjustment as to the number and kind of shares and
the purchase price for shares thereunder, or, in the
discretion of the Board, the Plan and the Options issued
hereunder shall terminate on the effective date of such
transaction and appropriate provision shall be made for
payment to the participant of an amount in cash equal to the
fair market value of a common share multiplied by the number
of common shares subject to the unexercised Options less the
exercise price for such Options; provided however that in no
event shall the Board take any action or make any
determination under this Paragraph 7(b) which would prevent a
transaction described in clause (a) or (b) (ii) or (iii) above
from being treated as a pooling of interests under generally
accepted accounting principles if the transaction is intended
to be treated as a pooling of interests.
(c) In the event of a "Change in Control Event" as defined in The
Talbots, Inc. 1993 Executive Stock Based Incentive Plan, each
Option to the extent not then fully vested or fully
exercisable shall automatically become fully vested and fully
exercisable and any restrictions on all Stock Awards shall
automatically lapse.
8. Miscellaneous Provisions.
(a) Except as expressly provided for in the Plan, no Eligible
Director or other person shall have any claim or right to be
granted an Option or Stock Award under the Plan. Neither the
Plan nor any action taken hereunder shall be construed as
giving any Eligible Director any right to be retained in the
service of the Company whether as a director or otherwise.
(b) To the extent permitted by law, a participant's rights and
interests under the Plan may not be assigned, transferred,
hypothecated or encumbered in whole or in part, either
directly or by operation of law or otherwise (except in the
event of a participant's death, by will or the laws of descent
and distribution), including, but not by way of limitation,
execution, levy, garnishment, attachment, pledge, bankruptcy
or in any other manner, and no such right or interest of any
participant in the Plan shall be subject to any obligation or
liability of such participant.
(c) No common shares shall be issued hereunder unless counsel for
the Company shall be satisfied that such issuance will be in
compliance with all applicable federal, state, local and
foreign securities, securities exchange and other applicable
laws, rules and requirements, including, without limitation,
registration of all common shares issuable under the Plan with
the Securities and Exchange Commission and the listing of all
such common shares with the applicable national securities
exchange.
(d) It shall be a condition to the obligation of the Company to
issue any shares under any Stock Award or to issue common
shares upon exercise of an Option that the participant (or any
beneficiary or person entitled to act hereunder) pay to the
Company, upon its demand, such amount as may be requested by
the Company for the purpose of satisfying any liability to
withhold federal, state, local or foreign income or other
taxes. If the amount requested is not paid, the Company may
refuse to issue any shares under any Option or Stock Award.
(e) The expenses of the Plan shall be borne by the Company.
(f) By accepting any Option, Stock Award or other benefit under
the Plan, each participant and each person claiming under or
through such participant shall be conclusively deemed to have
indicated his or her acceptance and ratification of, and
consent to, any action taken under the Plan by the Company or
the Board.
<PAGE>
(g) The appropriate officers of the Company shall cause to be
filed any reports, returns or other information regarding
Options or Stock Awards hereunder or any common shares issued
pursuant thereto as may be required by Section 13 or 15(d) of
the Exchange Act or any other applicable statute, rule or
regulation.
(h) The Plan is intended to comply with Rule l6b-3 promulgated
under the Exchange Act and is further intended to be
administered in the manner specified in that Rule, and the
Board shall interpret and administer the provisions of the
Plan or awards granted hereunder in a manner consistent
therewith. Any provisions inconsistent with such Rule shall be
inoperative and shall not affect the validity of the Plan or
any awards granted hereunder.
9. Amendment or Discontinuance. The Plan may be amended at any time and
from time to time by the Board as the Board shall deem advisable;
provided, however, that no amendment shall become effective without
shareholder approval if such shareholder approval is required by law,
rule or regulation, and provided further, to the extent required by
Rule 16b-3 of the Exchange Act as in effect from time to time, Plan
provisions relating to the amount, price and timing of Options shall
not be amended more than once every six months, except that the
foregoing shall not preclude any amendments to comport with changes in
the Internal Revenue Code of 1986, the Employee Retirement Income
Security Act of 1974, or the respective rules thereunder in effect from
time to time. No amendment of the Plan shall materially and adversely
affect any right of any person with respect to any Option or Stock
Award theretofore granted without such person's written consent. No
amendment may become effective if it would cause the Plan to fail to
meet the applicable requirements of Rule 16b-3.
10. Termination. The Plan shall terminate upon the earlier of the following
dates or events to occur, unless further extended by the Board:
(a) upon the adoption of a resolution of the Board terminating the
Plan; or
(b) May 22, 2005.
No termination of the Plan shall materially and adversely affect any of the
rights or obligations of any person, without the consent of such person, under
any Option or Stock Award theretofore granted under the Plan.
<PAGE>
SCHEDULE 1
Eligible Number of Common Shares
Directors Covered by Option
------------------------- ------------------------------------
E. Kennan 4,000
M. Willes 4,000
T. Tokiwa 3,000
Y. Kimura 3,000
M. Okada 3,000
I. Tsuruta 3,000
DEFINITIVE PROXY
COMPANY HIGHLIGHTS DURING FISCAL 1999
* Company sales for fiscal 1999 increased 13% to $1,290.9 million. Comp
store sales grew 8.7% and catalog sales increased 13% over 1998.
* During the fiscal year, the Company opened 35 net new stores and its
Internet site went online in November 1999.
* During the fiscal year, the Company repurchased $36.3 million of its
common stock under its stock repurchase program.
* Earnings per diluted share in fiscal 1999 increased 61% to $1.85 per
share.
PROXY
THE TALBOTS, INC. ANNUAL MEETING OF SHAREHOLDERS
May 25, 2000
This Proxy is Solicited on Behalf of the Board of Directors of The Talbots, Inc.
The undersigned hereby appoints Edward L. Larsen, Stuart M. Stolper,
and Richard T. O'Connell, Jr., and each or any of them, with power of
substitution, proxies for the undersigned and authorizes each of them to
represent and vote, as designated, all of the shares of stock of The Talbots,
Inc. (the "Company") which the undersigned may be entitled to vote at the Annual
Meeting of Shareholders of the Company to be held at FleetBoston Financial, 100
Federal Street, Boston, Massachusetts on May 25, 2000, at 9:30 a.m., and at any
adjournment or postponement of such meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IF NO CONTRARY DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ALL PROPOSALS. PLEASE VOTE PROMPTLY.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE>
TALBOTS THIS IS YOUR PROXY.
c/o EquiServe YOUR VOTE IS IMPORTANT.
P.O. Box 9398
Boston, MA 02205-9398
Vote by Telephone Vote by Internet
- ----------------- ----------------
It's fast and convenient! It's fast and convenient!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683). Go to http://www.eproxyvote.com/tlb
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement and Proxy Card. Statement and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/tlb
3. Enter your 14-digit Voter Control 3. Enter your 14-digit Voter
Number located on your Proxy Card Control Number located on your
above your name. Proxy Card above your name.
4. Follow the recorded instructions. 4. Follow the instructions
provided.
YOUR VOTE IS IMPORTANT! YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/tlb
anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET.
| X | Please mark votes as in this example.
1. ELECTION OF DIRECTORS
To elect the following Nominees as Directors:
Nominees: (01) Arnold B. Zetcher, (02) Toshiji Tokiwa,
(03) Elizabeth T. Kennan, (04) Yoichi Kimura,
(05) H. James Metscher, (06) Motoya Okada,
(07) Isao Tsuruta and (08) Mark H. Willes.
For all Nominees |___| |___| Withheld from all Nominees
|___| _______________________________________
For all nominees except as noted above.
2. AMENDMENT TO CERTIFICATE OF INCORPORATION
To approve an amendment to the Company's Certificate of Incorporation to
increase the authorized shares of Common Stock from 40 million shares to
100 million shares.
|___| For |___| Against |___| Abstain
3. APPROVAL OF RESTATED DIRECTORS STOCK PLAN
To approve the Restated Directors Stock Plan.
|___| For |___| Against |___| Abstain
4. SELECTION OF AUDITORS
To ratify the appointment of Deloitte & Touche LLP as independent auditors
for the 2000 fiscal year.
|___| For |___| Against |___| Abstain
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT |___|
MARK HERE IF YOU PLAN TO ATTEND THE MEETING |___|
(Please sign exactly as your name or names appear hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title as such. If a corporation, please sign in full corporate name by president
or other authorized officer. If a partnership, please sign in partnership name
by authorized person.)
Signature:________________ Date:________ Signature:______________ Date:_________
- --------------------------------------------------------------------------------
INTERNET VOTING INSTRUCTIONS
- --------------------------------------------------------------------------------
[Page 1]
If you have more than one proxy card, please vote only one card at a time.
1. Enter the Voter Control Number that appears in the box on your proxy
card.
[___________]
2. Enter the last 4 digits of your U.S. Taxpayer Identification (Social
Security) Number for this account.
[___________]
If you do not have a U.S. Taxpayer Identification Number for this
account, please leave this box blank.
Important: For your vote to be cast, the Voter Control Number and the
last four digits of the U.S. Taxpayer Identification (Social Security)
Number for this account must match the numbers on our records.
3. Enter your e-mail address to receive an e-mail confirmation of your
vote.
[___________]
Enter your e-mail address again for validation.
[___________]
[Proceed]
<PAGE>
[Page 2]
TALBOTS
Welcome!
Name Line
Address Line
City, State Zip Line
[Proceed]
<PAGE>
[Page 3]
TALBOTS
PROXY
May 25, 2000
This Proxy is Solicited on Behalf of the Board of Directors of The Talbots, Inc.
The undersigned hereby appoints Edward L. Larsen, Stuart M. Stolper, and Richard
T. O'Connell, Jr., and each or any of them, with power of substitution, proxies
for the undersigned and authorizes each of them to represent and vote, as
designated, all of the shares of stock of The Talbots, Inc. (the "Company")
which the undersigned may be entitled to vote at the Annual Meeting of
Shareholders of the Company to be held at FleetBoston Financial, 100 Federal
Street, Boston, Massachusetts on May 25, 2000, at 9:30 a.m., and at any
adjournment or postponement of such meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO CONTRARY DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" ALL PROPOSALS. PLEASE VOTE PROMPTLY.
The Board of Directors Recommends a Vote
"FOR" all Nominees for Director.
"FOR" Proposals 2, 3 and 4.
Check this box to cast your vote in accordance with the recommendations of the
Board of Directors. [_]
The Board of Directors Recommends a Vote "FOR" all Nominees for Director.
1. ELECTION OF DIRECTORS
[___] For All Nominees Except As Noted Below
[___] Withheld As To All Nominees
Or, check the box for the Director(s) from whom you wish to withhold your vote:
<PAGE>
[ ] Arnold B. Zetcher
[ ] H. James Metscher
[ ] Toshiji Tokiwa
[ ] Motoya Okada
[ ] Elizabeth T. Kennan
[ ] Isao Tsuruta
[ ] Yoichi Kimura
[ ] Mark H. Willes
The Board of Directors Recommends a Vote "FOR" Proposals 2, 3 and 4.
2. AMENDMENT TO CERTIFICATE OF INCORPORATION. To approve an amendment to
the Company's Certificate of Incorporation to increase the authorized
shares of Common Stock from 40 million shares to 100 million shares.
For [___] Against [___] Abstain [___]
3. APPROVAL OF RESTATED DIRECTORS STOCK PLAN. To approve the Restated
Directors Stock Plan.
For [___] Against [___] Abstain [___]
4. SELECTION OF AUDITORS. To ratify the appointment of Deloitte & Touche
LLP as independent auditors for the 2000 fiscal year.
For [___] Against [___] Abstain [___]
Check the box below, if the option applies to you.
[___] MARK HERE IF YOU PLAN TO ATTEND THE MEETING
To submit your vote please click the button below.
(Your vote will not be counted until the Submit Your Vote button is clicked.)
[Submit Your Vote]
<PAGE>
[Page 4]
TALBOTS
Your proxy vote has been recorded as follows:
1. ELECTION OF DIRECTORS
[___________]
2. AMENDMENT TO CERTIFICATE OF INCORPORATION. To approve an amendment to
the Company's Certificate of Incorporation to increase the authorized
shares of Common Stock from 40 million shares to 100 million shares.
[___________]
3. APPROVAL OF RESTATED DIRECTORS STOCK PLAN. To approve the Restated
Directors Stock Plan.
[___________]
4. SELECTION OF AUDITORS. To ratify the appointment of Deloitte & Touche
LLP as independent auditors for the 2000 fiscal year.
[___________]
Please review your vote. If this is incorrect, please use the Back button on
your browser, change your vote and resubmit. If this is correct, please click
the button below.
[Proceed]
<PAGE>
[Page 5]
Success! Your vote has been cast and will be tabulated by Equiserve within 24
hours. Please take a moment to review the options below.
If you wish to submit an address change request for this account, click the
button below.
[Proceed]
You can now vote another proxy card or exit to the EquiServe [Hyperlink]
homepage.
[Vote Another Proxy]
The Talbots, Inc.
2000 Telephone Voting Script
Toll Free: 1-877-PRX-VOTE or 1-877-779-8683
1. Welcome to the electronic voting system. Please have your proxy card or
voting instruction sheet or ballot available before voting.
2. Enter the Voter Control Number as it appears on the card followed by
the pound sign.
3. One moment please while we verify your information.
4. Enter the last four digits of the U.S. Social Security number or the
U.S. taxpayer identification number for this account followed by the
pound sign.
5. The company that you are voting is Talbots.
6. Your vote is subject to the same terms and authorizations as indicated
on the proxy card. It also authorizes the named proxies to vote
according to the instructions at the meeting of the stockholders.
7. To vote all proposals in accordance with the recommendations of the
Board of Directors, press 1. If you wish to vote on one proposal at a
time, press 2.
If 1, go back to PLAYBACK.
If 2, go to 8.
8. Item #1. To vote for all nominees, press 1. To withhold from all
nominees, press 2. To withhold from individual nominees, press 3.
If 1, go to 9.
If 2, go to 9.
If 3, go to DIRECTOR EXCEPTION.
DIRECTOR EXCEPTION
Enter the 2-digit number next to the nominee from whom you would like
to withhold your vote, followed by the pound key. Or if you have
completed voting on directors, press the pound key again.
If pound key entered twice, go to the next item.
If valid nominee number, go to NEXT NOMINEE.
NEXT NOMINEE
To withhold your vote from another nominee, enter the 2-digit number
next to the nominee followed by the pound key, or if you have completed
voting on directors, press the pound key again.
If pound key entered twice, go to the next item.
If valid nominee number, go to NEXT NOMINEE.
INVALID NOMINEE NUMBER
You have entered an invalid nominee number.
{Go to NEXT NOMINEE.}
9. Item #2. To vote for, press 1; against, press 2; abstain, press 3.
If 1, go to 10.
If 2, go to 10.
If 3, go to 10.
10. Item #3. To vote for, press 1; against, press 2; abstain, press 3.
If 1, go to 11.
If 2, go to 11.
If 3, go to 11.
11. Item #4. To vote for, press 1; against, press 2; abstain, press 3.
If 1, go to 12.
If 2, go to 12.
If 3, go to 12.
12. If you would like to attend the annual meeting, press 1. If not, press
2.
If 1, go to 13.
If 2, go to 13.
13. If you would like to discontinue mailing an annual report to this
account, press 1. If not, press 2.
If 1, go to 14.
If 2, go to 14.
14. You have cast your vote as follows:
PLAYBACK {Playback the appropriate vote for this proxy card.}
DEFAULT PLAYBACK
You have voted in the manner recommended by the Board of
Directors.
DIRECTOR PROPOSAL PLAYBACK
VOTED FOR ALL NOMINEES: Item #. You have voted for all
nominees.
WITHHOLD FROM ALL NOMINEES: Item #. You have voted to withhold
your vote from all nominees.
WITHHOLD FROM INDIVIDUAL NOMINEES: Item #. You have voted for
all nominees except for the following nominee numbers.
FOR/AGAINST/ABSTAIN PROPOSAL PLAYBACK: Item # {For | Against |
Abstain}
15. To confirm your vote, press 1. To cancel your vote, press 2.
If 1, go to 17.
If 2, go to 16.
16. Your vote has been cancelled. If you wish to vote another card, press
1. Otherwise, please hang up and mark, sign, and return your card in
the envelope provided. Thank you for calling.
17. Your vote has been successfully recorded. It is not necessary for you
to mail your card. If you wish to vote another card or change your
vote, press 1. Otherwise, please hang up. Thank you for voting.
INVALID CONTROL NUMBERS
We are unable to authenticate the information that you
entered.
NO KEY PRESSED
Go to the same item (repeat three times); otherwise, go to
Error.
INVALID NUMBER
Go to the same item (repeat three times); otherwise, go to
Error.
ERROR
We are unable to process your request at this time. Thank you
for calling. {Call ends.}
